I was invited to join Paul Ace on Amplify to 7 Figures to discuss buying and selling businesses.

 

Listen to our discussion about the following:

1. Defining a small business

2. Why buy a business over starting a new one

3. Common mistakes to look for when buying a business

Rob's secret formula to selling a lot of businesses. How to sell a business.

Rob’s Secret Formula to Sell a lot of Businesses

If you’ve been on my YouTube channel for long, you’ll realize that selling a business is hard and most never find a buyer.

How is it then that Rob Goddard’s Evolution CBS is so highly recommended in the UK’s middle market?

What is it that Rob does to sell almost all the businesses he has for sale that other brokers do not?

He’s tough on the sellers and he only takes the best accounts.

Do you think your business would qualify to be one of Rob’s clients?

After considering his list, many business owners will realize they’ve got a lot of work to do.

Check out the interview here: https://youtu.be/bzjrUZQsCWc

Learn how to sell your own small business at https://www.HowToSellMyOwnBusiness.com

Learn how to buy an already-successful and profitable business even in the covid-recession of 2020: https://www.BusinessBuyerAdvantage.com   

Book a call with me at https://www.clarity.fm/davidbarnett  

Stop missing my videos and other news. Join my email list here: https://www.DavidCBarnettList.com   

 

Total CEO Vinny Fischer and I talk about selling your own business.

I had a chance to speak with Vinny Fischer about selling your own business... check out the interview:

Catch more of Vinny's interviews here: http://thetotalceo.com/show/ 

Stoopid Rules of Thumb. The Story of the 5X Accountant. How To Sell a Business

Yes, I know how to spell ‘stupid,’ please don’t e-mail me.

I’m cranky and sore and upset.  I’ve got a cold and an ear infection. 

What makes me more cranky and upset is when I hear the same poor advice about rules of thumb for pricing small businesses being passed around again and again and again.

This week I tell the story of the old accountant who told me once in a workshop, ‘Businesses sell for 5 times their cash flow.  Those with real estate sell, those without don’t.’

Simplistic rules of thumb like this one guarantee only one thing… mistakes are being made and it’s costing someone dearly.

I explain why those with real estate sell, those without don’t in this video and the answer will make you sick to your stomach if you happen to be a business owner who could have fallen victim to this kind of advice.  Watch it here: https://youtu.be/ck_AmnOIzDE

If you own a business and will want to sell one day, you need to educate yourself about how this process works and give yourself time to get ready.

Learn what’s involved in selling your small business.  Take my 3 hour online course at www.HowToGetOutOfMyBusiness.com or buy my Amazon best-selling book; How To Sell My Own Business.  Available from Amazon.com or Amazon.ca  

Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it.

If you would like to hear from me weekly before anyone else, you can sign yourself up at www.DavidCBarnett.com 

I’m coming to Charlottetown, Prince Edward Island in January 2017.  My live events always fill up fast.  Find all my live events here: http://davidbarnett.eventbrite.ca

Thanks and I’ll see you next time. 

Pay off your Small Business Debt to build wealth? Think Again... How to Sell a Business

A few weeks go I made a video and blog post about whether it made sense to pay off all your small business debts in order to prepare a business for sale.  Watch the video here: https://youtu.be/pOJ3B1_K9L8

I promised to make another video discussing how paying off small business debt would affect the personal wealth of the owner.

You see, most small business owners are debt-averse.   They believe that debt is bad and that it makes sense to pay off debt to increase one’s net-worth.

The reality though is that debt gives you leverage and small businesses are risky.

Watch this week’s video to see how paying off small business debt actually reduces your rate of return and increases your risk!

Watch it here: https://youtu.be/VuwdlTu3BEI

If you think you would benefit from my help and guidance over the coming year to meet your business goals, you may wish to consider my 2017 mastermind.  It’s for small business owners who want to improve their business or people who want to find and buy one.

If you’re thinking of selling your small business and want a whole bunch of FREE information and advice, visit www.HowToSellMyOwnBusiness.com there are free videos, reports and access to my modestly priced books and online course on the process of selling a business.

For help on buying a business, visit www.BusinessBuyerAdvantage.com

Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it.

If you would like to hear from me weekly before anyone else, you can sign yourself up at www.DavidCBarnett.com 

My live events always fill up fast.  Find all my live events here: http://davidbarnett.eventbrite.ca

My November 30, 2016 Halifax workshop is being sponsored by CEED. You can register at www.CEED.ca

Thanks and I’ll see you next time. 

Should you sell your small business with a real estate agent? How to Sell a Business?

I recently had an exchange with a fellow on the West Coast who had some questions about selling his small business.

The conversation ended with, ‘well my friend is a commercial Realtor so if I have any more questions I’ll speak to him.’ Huh?!?

What on earth does selling real estate have to do with selling businesses?

It’s not the first time I’ve run into this in my career as a business broker and as a private sale transaction advisor.  There seems to be some idea out there that links businesses to real estate.

Let’s examine the characteristics of each and see where the overlap is:

Real Estate: doors, windows, roofs, foundations, walls, insulation…

Businesses: receivables, payables, employees, inventory…

I’m stumped.  Well, not totally.  There is a big reason why I think that many small business owners somehow end up trying to sell their business using a real estate agent and it has to do with silly outdated laws.  I made this video to explain: https://youtu.be/s9HkiHiiEB0

What’s really amazing though, is that while I was a business broker, I noticed that many real estate agents who normally sold houses were willing to take on businesses to sell.

AT THE VERY SAME TIME, my biggest source of referrals were COMMERCIAL REALTORS. Funny right? Watch the video and I’ll explain to you why.

If you’re thinking of selling your small business and want a whole bunch of FREE information and advice, visit www.HowToSellMyOwnBusiness.com there are free videos, reports and access to my modestly priced books and online course on the process of selling a business.

For help on buying a business, visit www.BusinessBuyerAdvantage.com

Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it.

If you would like to hear from me weekly before anyone else, you can sign yourself up at www.DavidCBarnett.com 

My live events always fill up fast.  Find all my live events here: http://davidbarnett.eventbrite.ca

Thanks and I’ll see you next time. 

Pay off debts when getting ready to sell your small business?? How to Sell a Business

A debt-free business is easier to sell; Right?

I had an online exchange the other day with a guy on the west coast who believed that paying off his business debt was a key ingredient in preparing it for sale.

WRONG.

There are all kinds of problems with this thinking but this week I simply want to discuss it from the buyer’s point of view.

(There will be another video in two weeks about how this thinking affects the seller’s wealth.)

Does small business debt have an impact on the value of the company?

Nope, just like your mortgage doesn’t have an impact on the value of your house. The value of a business is derived from its cash flow.

Do you think they care if your business owes money? 

Well, this is a little more complicated.   A buyer may actually care quite a lot and it may not be for the reasons that a seller thinks.  I made this video to explain why some kinds of debt within a business may be very interesting for a potential buyer.  Watch it here: https://youtu.be/pOJ3B1_K9L8

This business owner would certainly benefit from working with me to get his business ready for sale.  I’ve got another mastermind group starting up for 2017.  E-mail me if you’re interested in learning more.  It’s for those who plan to buy, sell, or improve their business in 2017; dbarnett@alpatlantic.com

Learn how I help people sell their business at www.HowtoSellMyOwnBusiness.com

Learn how to buy a business. Visit www.BusinessBuyerAdvantage.com

HALIFAX, NS: I’m coming on November 30, 2016.  Find out more and register at https://ceed.ca/calendar/

Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it.

If you would like to hear from me weekly before anyone else, you can sign yourself up at www.DavidCBarnett.com 

Thanks and I’ll see you next time. 

The problem with 16 Hour Workdays - How to Sell a Business

I had the pleasure of speaking to a business owner in Toronto while I was away on vacation. It was just a brief consult done from a park bench in Brussels.

He and the other owners had become aware of a competing firm that had been acquired by a larger company and wanted to try to do the same thing.

The conversation centered around the best strategy… hiring an intermediary, hiring someone in-house to try to find a suitor, etc.

During this time, my client made a little comment about how he and the other founders of the company were working almost 16 hours a day and how they found it impossible to hire people to help them out.

I made this recording telling the story and how you can go about fixing it.  Listen here (audio only on YouTube): https://youtu.be/9n68EuvNXfw

Needless to say, it is quite difficult to convince someone to pay money to buy a business that needs this kind of management engagement.

Proper businesses have structure, organization and everyone knows what they’re responsible for and what duties they need to get done.  Without this, it’s impossible to grow and it sure does look scary for anyone looking at buying.

The topic was very apropos as I’m in the middle of creating my latest workshop; Building a Business that Someone Will Want to Buy.  It’s going to be presented on October 18 in Moncton, NB and will likely become an online course.

To learn how I can help you sell your business yourself, visit www.HowToSellMyOwnBusiness.com

For a full education and help on buying a business, visit www.BusinessBuyerAdvantage.com

Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it.

If you would like to hear from me weekly before anyone else, you can sign yourself up just to the left of this post.  If you need my help with your project, give me a call at (506) 381-8416.

Do you live in the Maritimes?  I’ve got workshops coming up on buying and selling businesses in the fall.  Book now http://davidbarnett.eventbrite.ca

Thanks and I’ll see you next time. 

What I see in the Market for Small Businesses - Buy a Business - Sell a Business

Well, spoiler alert, there is no market for small businesses.

I made this video to explain why. https://youtu.be/aOFhyYjFoYc

You see for a ‘market’ to exist, you need many buyers, sellers and a product or commodity.  For example, there is a market for 4-door used cars and a market for 3-bedroom homes in each town and city, but small businesses are very individual.  They’re unique.

Therefore, they each have their own market!

In the video I give an example of the process engineer who will never buy the highly profitable flower shop.  I used to see it all the time when I owned my business brokerage.

As far as pricing goes, it doesn’t change much over time except if certain industries are perceived to be more or less risky.  Business are valued on their cash flow and what the buyer is willing to pay is based on their perception of the risk that the cash will continue to flow into the future.

There is one exception though.  It’s an old story about market manipulation.

I’ve seen first-hand that government programs meant to encourage immigrant investors are causing price bubbles in certain categories.  Convenience stores, franchise food locations, Laundromats, gas stations.

Anywhere someone with limited English can run a simple business and quickly learn enough words to make change and serve customers.

I recently worked on a case where a newcomer was willing to overpay by 40%... because he was up against a time-limit and if he didn’t buy a business he would lose a $75,000 deposit that he had made to get into the country.

Welcome to Canada, let us into your wallet.  I bet he feels all warm and fuzzy about igloos, beavers and maple syrup.

Just like in any market where politicians and civil servants decide to meddle, an artificial urgency has been created and business sellers are taking full advantage of these victims created by government policy.

For a full education and help on buying a business, visit www.BusinessBuyerAdvantage.com

To learn how I can help you sell your business yourself, visit www.HowToSellMyOwnBusiness.com

If you’d like to learn how to create high returns by making local private lending and lease deals, check out http://www.LocalInvestingCourse.com The Local Investing Academy starts in September.  For a quick introduction, read Invest Local.  It’s available from Amazon stores worldwide or as a .pdf here: https://gum.co/quoB

Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it.

If you would like to hear from me weekly before anyone else, you can sign yourself up at www.DavidCBarnett.com  If you need my help with your project, give me a call at (506) 381-8416.

Do you live in the Maritimes?  I’ve got workshops coming up on buying and selling businesses in the fall.  Book now http://davidbarnett.eventbrite.ca

Thanks and I’ll see you next time. 

How to Buy a Business with NO MONEY- Should you? David C Barnett

How to buy a business with NO MONEY?

I’ve gotten some questions from viewers asking how they could buy a business with no money. 

There is a belief out there that if you can structure things correctly, it’s possible to buy a profitable business while using none of your own money.

I’ve done deals where a buyer borrowed all the money to buy a business, but they did so by putting up some personal assets as collateral.

I’ve done deals where a buyer gets a seller to essentially finance 100% of the purchase, but the buyer was using lots of their own money to improve the business with a short timeline to re-financing it. 

In both cases, we can hardly say that the buyers had ‘no money.’  They certainly had resources to help them make the deals happen.

I made this video to explain the different scenarios that someone might conceivably buy a business with no money and the dangers for the buyers and sellers in each. Watch: https://youtu.be/NVTgDT7Cc2g

In asset purchases, the danger for a buyer, even if there is no down-payment, is that there will be insufficient operating capital and you’d be in a cash flow crisis from day one.

In share deals, if there is a net-positive operating capital balance, the buyer could fleece the company and run away with cash and the seller would be left with nothing.  Who would put themselves in this kind of position other than a parent handing over a business to a child?

The one opportunity for buyers to get their hands on a business with ‘no money’ is usually when there is negative equity.  Watch the video to see my thoughts on this.

If you’d like to learn how to create high returns by making local private lending and lease deals, check out http://www.LocalInvestingCourse.com The Local Investing Academy starts in September.  For a quick introduction, read Invest Local.  It’s available from Amazon stores worldwide or as a .pdf here: https://gum.co/quoB 

Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it.

If you would like to hear from me weekly before anyone else, you can sign yourself up just to the left of this post.

Do you live in Toronto or the Maritimes?  I’ve got workshops coming up for Toronto in September on buying and selling businesses and in October-December in the Maritimes.  Book now http://davidbarnett.eventbrite.ca

Thanks and I’ll see you next time. 

Buying assets vs. buying shares - How to Buy a Business, How to Sell a Business

When buying or selling a business, a common question that comes up is whether to buy or sell the shares or the assets of the business.

For some people who are not familiar with this, the concept can be hard to grasp.  That’s why I made this video to explain things in simple terms: https://youtu.be/HgDLgwbXgj0

Here’s an illustration.  Imagine that Mark owns a lawn maintenance company; Mark’s Lawns Inc.  Mark’s Lawns Inc. owns a tractor.

If you wanted to get into the lawn maintenance business you could buy Mark’s Lawns Inc.  The ownership of the tractor doesn’t change.  It was and still is owned by Mark’s Lawns Inc.  In this case, the seller is Mark.  He’s selling the shares of the corporation to you.

The other way to buy the business would be to buy the tractor.  In this case, Mark’s Lawns Inc. is the seller.  The ownership of Mark’s Lawns Inc. doesn’t change.  Mark will still own this corporation after the transaction, the only difference is that the company will have money in it instead of a tractor.

Because corporations are people under the law, a share sale makes a new owner subject to liabilities to past events.  An attorney will do their best to structure warranties to try to protect a buyer but at the end of the day, a share sale could expose a buyer to unwanted liabilities.

Asset sales are technically just the purchase of ‘stuff.’  In this regard a buyer doesn’t necessarily have to worry about most of the past issues with the corporation.  Also there are usually tax advantages for buyers who buy assets because equipment that may have been fully depreciated by a seller may now appear on the buyer’s books at fair market value and can be depreciated again by the buyer.

Seller’s know this and there is an equal tax disadvantage vis-à-vis depreciated equipment.  Also, in some places, such as Canada, there is preferred tax treatment on the sale of shares of an eligible corporation.

So when people ask me if they should buy or sell shares or assets I tell them this: Buyers should try to buy assets, sellers should try to sell shares but at the end of the day it doesn’t matter.

The type of transaction will form part of the negotiation. 

Let me give you a simple example.  A seller wants $250,000 for their business.  A buyer offers $200,000.  The seller says that they can’t go that low unless the buyer is willing to purchase shares… a deal is struck.

The tax advantages/disadvantages of either form of sale are known by both parties and can sometimes be estimated by both parties.  As such, it just comes down to dollars and cents in most cases.. unless there are specific reasons to buy shares such as contracts, government regulation, etc… but that is a subject for another day.

If you’d like help to buy or sell a business, call me at (506) 381-8416 or visit www.HowToSellMyOwnBusiness.com or www.BusinessBuyerAdvantage.com

Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it.

If you would like to hear from me weekly before anyone else, you can sign yourself up to the left of this post in the form.  

Improve your business each and every day, download my FREE daily cheat sheet and hang it in your work area to keep yourself focused. https://gum.co/15Questions/FREE 

Do you live in Toronto?  I’ve got workshops coming up for Toronto in September on buying and selling businesses.  Book now, there isn’t much room left..  http://davidbarnett.eventbrite.ca

If you’d like to learn how to create high returns by making local private lending deals, check out http://www.LocalInvestingCourse.com The Local Investing Academy starts in September. 

Thanks and I’ll see you next time.

How to push your business' 'self-destruct' button... You can ruin everything really fast! David C Barnett

How to Sell a Business – Keeping it a secret

One of the most distinct aspects of the market for small businesses is that it is a secret one.  The worst thing that a business owner can do is publicize the fact that their business is for sale.

Telling people that you want to sell your business is like pushing the ‘business self-destruct’ button.

If any of the following stakeholder groups finds out that a business is for sale, the business could be ruined and all that an owner has worked for could be destroyed:

• ·         Employees
• ·         Customers
• ·         Suppliers
• ·         Lenders
• ·         Competitors

I explain why secrecy is so important for each group in this NEW video: https://youtu.be/m0wWErgtlM0

I also explain what business for sale really means to 95% of the population.

Let me give you a little info on each one:

Employees: If they think change is coming, they may bail.  The best employees always have available opportunities with competitors.

Customers: If you deliver in the future or people rely on a warranty, they won`t have any faith in your future if they find out you’re for sale.

Suppliers: If these guys think there`s something wrong say `goodbye` to your trade credit.

Lenders: I’ve had more than one client have their credit line cut when their banker found out they were for sale.  I explain why in the video.

Competitors:  These guys will use anything they can to steal business.  News that a business is for sale will help them sew doubt in the minds of prospects.

If you want to learn how I help my clients advertise their business for sale confidentially, check out www.HowToSellMyOwnBusiness.com

There are plenty of FREE resources there to help you begin planning your transition out of your business.

Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it.

If you would like to hear from me weekly before anyone else, you can sign yourself up at www.DavidCBarnett.com 

Do you live in Toronto?  I’ve got three workshops coming up for Toronto in September.  Book now to get summer special ticket pricing.  http://davidbarnett.eventbrite.ca Some sessions have fewer than 20 seats left. Learn more about these workshops in this video: https://youtu.be/l2T3pwr9lkw

Thanks and I’ll see you next time.